Death Of Shopping Malls And Department Stores In Five Charts

Traditional retailers are getting killed by online shopping, especially Amazon. Five charts tell the story.

Core Retail Sales

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Core retail sales are retail sales excluding autos, auto parts, and gasoline.

I calculate 17.9% not 20% as shown in the above chart. But this is nitpicking.

I loved the idea in the lead chart, pulled off Twitter, and that is why I did this post.

Core Retail Sales Components

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Core retail sales include dining out (something impossible to do online), as well as grocery shopping (not realistically possible to do completely online especially meat, other fresh foods, and frozen foods).

Core Retail Sales Minus Food Categories vs Nonstore Retail

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Nonstore Retail Percentage of Core Sales Excluding Food

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Trend Won't Stop Here

This trend will not stop here.

Auto sales will eventually be mostly online. Dealers will become service centers.

Gasoline will give way to electric.

Uber, Lyft, and rent-on-demand will eventually replace car ownership.

The entire notion of "core" retail sales will itself change as delivery mechanisms and ownership preferences change.

This will not happen overnight. But the trends are clear on multiple fronts.

For now, expect more store retail store closings and bankruptcies.

Enormously Deflationary

The picture I present is enormously deflationary.

Technology is inherently deflationary by any realistic definition.

Fighting this, as central bankers do, is extremely counterproductive.

BIS Deflation Study

The BIS did a historical study and found routine deflation was not any problem at all.

Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the study.

It’s asset bubble deflation that is damaging. When asset bubbles burst, debt deflation results.

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